Stock Analysis

What Is The Ownership Structure Like For Jentech Precision Industrial Co., Ltd (TPE:3653)?

TWSE:3653
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A look at the shareholders of Jentech Precision Industrial Co., Ltd (TPE:3653) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of NT$34b, Jentech Precision Industrial is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Jentech Precision Industrial.

See our latest analysis for Jentech Precision Industrial

ownership-breakdown
TSEC:3653 Ownership Breakdown November 29th 2020

What Does The Institutional Ownership Tell Us About Jentech Precision Industrial?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Jentech Precision Industrial. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Jentech Precision Industrial's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSEC:3653 Earnings and Revenue Growth November 29th 2020

Hedge funds don't have many shares in Jentech Precision Industrial. Looking at our data, we can see that the largest shareholder is Xinchang International Industrial Co., Ltd. with 13% of shares outstanding. With 13% and 3.3% of the shares outstanding respectively, New Edge Co. and Fuh Hwa Securities Investment Trust Co. Ltd. are the second and third largest shareholders. Additionally, the company's CEO Yong-Chang Zhao directly holds 1.6% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jentech Precision Industrial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Jentech Precision Industrial Co., Ltd. This is a big company, so it is good to see this level of alignment. Insiders own NT$1.1b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 55% stake in Jentech Precision Industrial, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 26%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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